Amazon has been putting out fires all over the US, engaging in fierce firefights to retain its market share in e-books and e-readers, as well as branching out into newer territory such as publishing. But while all this has been going on, Kobo has been stealing a march in the international arena.

They already have localized stores in the Canada, UK, Hong Kong, and Australia, as well as a retail presence in New Zealand. After securing a fresh round of funding in April, Kobo announced plans for a major European expansion.

It has begun. Kobo has launched a local-language store in Germany. And they aren’t just matching Amazon Germany’s offering of 25,000 local language books, they are blowing it out of the water with 80,000 German titles. Also, their e-readers will be sold in a major physical retailer by August.

Kobo are moving fast. They were only founded in December 2009 by Canadian book chain Indigo, but already have more international e-stores than Amazon. CEO Michael Serbinis, speaking about the German launch, said “We’re not coming in when someone has been in the market for three years. It’s a far greater opportunity for us”.

Indeed. And they aren’t stopping there. They have further European launches planned, with local language stores with local language content opening in France, Spain, the Netherlands and Italy later this year.

Amazon’s German offering is only three months old, and it will be interesting to see what market share Kobo will capture with their larger book selection.

A lot could depend on which retailer they partner with, and how much exposure that gives them to the vast majority of readers who haven’t switched to e-books yet (which have captured less than 5% of the market in Germany).

Those percentages are even lower in the next four European countries they are targeting. However, they could find fertile ground for their approach.

The Spanish language market, in particular, has huge potential. It will be interesting to see if Kobo’s Spanish store will also serve Latin America. That could really get Amazon’s attention, especially given Telefonica’s plans.

Some commenters speculated on Monday that Amazon dropped the $2 surcharge in Australia (last year) due to increased competition from The Book Depository.

It would be great for writers and readers if Kobo’s move forced Amazon to do the same in Europe.

Amazon need to be careful here. There is a lot of customer anger out there about this surcharge – and that’s with only limited awareness of it. To get an idea of the strong feelings, see this thread from the Amazon forums.

These customers feel like they are being screwed. And they have a point. If Amazon don’t wake up, they could lose these customers to the first competitor that comes along with a solid e-reader and a decent e-book selection in their language.

Kobo could be that competitor.

Amazon has weaknesses in Europe that it doesn’t have in the US. Amazon only has Kindle stores in Germany and the UK. All other e-book customers are redirected to the US store, where they face a $2 surcharge on e-books.

In addition, these customers can only order the Kindle from the US store, and they face ridiculous delivery charges, and it gets shipped with a US plug.

Also, their share of the overall book market is smaller. Their only other sites in Europe, in France and Italy, only sell print books. They don’t even really advertise the Kindle at all.

Customers outside of France, Italy, Germany and the UK have long been frustrated at having to order print books from one of these stores, with restricted selections because of territorial rights, and additional delivery times and charges.

Amazon could fix all this tomorrow. While rolling out official Kindle stores to each market will take time, they could abolish the surcharge now. And they really should start selling the Kindle to international customers at regular prices.

If they don’t, by the time they finally get around to launching the Kindle across Europe, they might find the market has moved on without them.

As a self-publisher, I hope this doesn’t happen. While I welcome competition and would hate to see one company dominate (for all sorts of reasons), Amazon are by far the most “indie friendly” of all the major retailers.

I just wish they were a little friendlier to their international readers.

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About David Gaughran

David is Irish and lives in Dublin, where it rains every day and conversation is a sport. He writes historical adventures and has helped thousands of authors to self-publish through his workshops, books, and this here blog.

For a writer seeking publication, whether by trade or through self-publishing, this blog is indispensable.

It’s troublesome to me that amazon could, as you say, sleep at the wheel – what do you think is stopping them from widening their markets? Is the surcharge in place because of legal reasons perhaps? I know international markets are a great source of income to writers – but how is that knowledge (of those fruitful markets) lost upon amazon? They must know they are losing business because of these ridiculous charges and the lack of marketing for the kindle in these countries! Which leads me to believe it could be legal or technological issues in the way.

There have been a few people speculating in the comments of Monday’s post.

The most plausible theory put forward, in my opinion, was that Amazon are attempting to keep the markets “cool” until they are ready to go in full force with a full Kindle launch. What was interesting was that Amazon used to charge this surcharge in Australia until, I think, September last year. One Australian commenter reckoned they dropped it in the face of increased competition from The Book Depository.

There were rumours that they sped up the launch of the German Kindle store because Google Books were looking to expand there – but I don’t know if there is any truth in that. Interestingly, some people have spotted ads on the internet hiring people for the “Kindle Spain” and “Kindle France” teams which would seem to indicate that Amazon are, at the very least, looking at stores in those countries. However, it’s impossible to say how far along that project is, and whether they have actually decided to press ahead or not.

Oh and thank you for your kind comments. I think there are a lot of indispensable blogs out there: Joe Konrath’s, Dean Wesley Smith’s, Mike Stackpole’s, Robin Sullivan’s, Bob Mayer’s, Passive Guy’s, and Mike Shatzkin’s are just the ones off the top of my head. I just discovered Joel Friedlander’s site a couple of weeks ago, and that has a HUGE vault of information, it’s called The Book Designer, and when I get some time I am going to read as much of it as I can.

Thanks for the well-thought out replies! That’s intriguing though, that amazon would intentionally suppress markets even if there is some demand. As I’m not into marketing, I can’t really comment on how smart that is. And I made a sticky of all the sites you mentioned and plan on subscribing to those as well! Thanks for all the help! 🙂

It may not be their “goal” to suppress the markets. They may have the charge in place to offset certain costs. However, they will be fully aware of the side-effect, and have obviously factored that into their thinking, and feel it’s acceptable.

So the fact that Amazon doesn’t have Kindle stores in many European countries may not actually be Amazon’s choice. I’ve heard that in Italy at least, the big publishers there refuse to give their e-books to Amazon, thus crippling their efforts in the short term. They’ve seen what Amazon has done to publishers in the US and they’re scared. I have a feeling that Kobo is met with a lot less hostility than Amazon, although I have no information to back this up.

I think you are on to something there. European publishers have a lot of power and influence – much more so than in the US. In the UK, for example, they pretty much wrote the awful new internet legislation. Also, the European Union has raided several French publishers’ offices investigating price-fixing (and the investigation has since expanded across Europe). The strange thing about that is that price-fixing has been enshrined in law in many European countries for print books for some time, and indeed, France just passed a similar law for e-books, preventing Amazon (or others) discounting publishers books (by more than 5% I think) – even though all those laws seem to run contrary to EU law.

On top of that, self-publishers and small publishers are barred from many distribution channels. Building off that, many European publishers are banding together to create their own internet retailers, which will exclusively stock their products.

Because of all of this (and other reasons), the price of print books is very, very high in Europe. And so far, they have managed to keep e-book prices pretty high too. But Amazon is helping them here with the surcharge.

Now, imagine Amazon decided to let Europeans buy the Kindle from the US at regular prices and abolished the surcharge. Imagine they let Italian readers purchase cheap e-books from all self-publishers and all publishers who had world rights for their books. That’s not a small amount of books. Many Italians enjoy reading in English. That could pressure Italian publishers into getting on board or losing the market to foreign publishers.

If you don’t think that would work, look at the US. Many publishers HATE Amazon, and they would love to pull their books from them, but they can’t. Amazon have 60% of the e-book market. They have to deal with them. I believe Amazon could force a similar situation in Italy (and elsewhere) by opening the floodgates.

If they don’t, the risk losing the market to Kobo, Apple, and the publishers themselves who are building their own e-bookstores.

I think that’s an excellent strategy for Amazon. So excellent, and so like their strategies in the past, that again I’m wondering why they haven’t done it already. Perhaps there is some behind the scenes trade regulation or bureaucratic red tape that is slowing them down?

My head is reeling—such heady food for a guppy like me. Thanks for such interesting posts.

I am waiting for a publisher to finish reading my manuscript and accept or reject; and, if the latter, then I will self-publish the first in a series of mysteries that take place in Sicily in the 1860s. Have my feelers out with people I know in all parts of Italy, who say they are very interested in my book; and what you say, David, is true: 1) Italians love to read in English; and, 2) ebooks are very hard or next to impossible to get; and 3) European publishers are so so so strong, much stronger than in the U.S. They have their own bookstores every half-block in Paris, lots in other major cities. The Kobo European foray vs. Amazon’s surcharge strategy will be really fascinating to watch—unless of course Amazon swallows Kobo (shudder). Watching publishing today is like reading an off-the-charts thriller, and before this post, I must admit, I wasn’t thinking globally. Not at all.

And speaking of globally, if slightly off the subject, I understand there are companies that are selling tablets in China with an old version of android pre-loaded with the kindle app for the equivalent of $40.

If there is a clever strategy behind Amazon’s behaviour as far as Europe (and the rest of the world) is concerned, it is very well hidden.
Apart from the surcharge (and not wanting to explain it), they also made at least two major mistakes when launching the Kindle in Germany:

1. Price:
They offer them for the same figures as in the US (139,- and 189,-) but of course in different currencies. What should be around € 100,- (for the $ 139,-) is € 139,-. That means the price for the device is 40% higher than in the US… ($ 189,- should be € 135,- instead of € 189,-).

2. Language
They were not able to come up with a German language version, the Kindles sold in Germany come with an English user interface (and keyboard). Of course, knowledge of English as a foreign language in Germany is quite high, but that is mainly among younger people and middle aged like myself, but… And we all know that “the elderly” like e-readers because they can change the font size… I think this was (and is) a very stupid mistake on Amazon’s side (which would have been not so very expensive to avoid).

Looking at this situation (Amazon making it look like they don’t really want to do business), Kobo’s move is very exciting, especially as their e-reader Touch will be available in several languages (among them German and Italian). If they decide on the right price (€ 99 would still be higher than the $ 130 now on Borders, but below the magic 100), it should give the e-books business in Germany a big boost.

As far as the Kobo store supposed to open today is concerned, I still couldn’t access it: kobobooks.de always takes me to kobobooks.com, but I guess they will fix that soon.

The only way I can get into the Kobo store is through Smashwords. However, my books haven’t appeared there yet as Smashwords are having some problems (just in the last month or so) shipping books to Kobo. I’m not sure what the deal is.

David, from what I’ve read, Kobo is working toward creating a PubIt or KDP type setup so that authors can self-publish their ebooks directly through them. This will not be good for Smashwords, who is trying to improve their Kobo sales reporting to authors, but it will be yet another shot across the bow of Amazon’s battleship.

Don’t get me wrong, I appreciate the fact that Amazon got this whole ebook ball rolling, but they have been know to throw their weight around, and as I self-published author, I don’t want to get squashed. The only protection we have is competition for Amazon. So I’m happy that B&N and Kobo are supplying it. 😉

That’s excellent news. Did you hear anything about when they plan to role it out or whether it will be open to international self-publishers (PubIt isn’t)? I’ve heard writers complain that visibility on the Barnes & Noble site is much lower unless you go direct through PubIt. I wonder if it will be the same with Kobo. I’ve heard one writer who said she can’t find her own book there, and yet has made sales, which could mean their are similar problems.

I do know that not being able to tailor things like the description specifically for the site can have a big effect on sales.

David, I’m not sure how long it will be before Kobo rolls out their publishing platform, but it sounded like it wouldn’t be more than a few months.

Yes, I wish PubIt would allow more control over description formatting. It would be nice to add bolding and italics. Hopefully Kobo will provide this capability, the way Amazon’s Author Central does. I do wish, however that the formatting done in Author Central would apply to Amazon UK and the other non-US Amazon sites as well. Maybe this will be coming.

I think the very clever strategy is called ‘maximising profit’. (Cynic? Moi?) As Stefan has pointed out, the Kindle cost 40% more in Europe than the States. Amazon aren’t alone in this. The same can be said for software, computer games and so on. I thought about buying a downloaded computer game recently – the price cas $9.99 in the US but £14.99 in the UK. I didn’t make the purchase.

Why Europe is seen as a soft touch when is comes to pricing policy defeats me. Maybe we don’t squeal loud enough.

But the blog post I wrote on the surcharge is getting a huge amount of readers. I’m getting traffic from all sorts of places – Italian readers forums, Hungarian readers forums, and I have been contacted for an interview about it. The more people that become aware of this the better.

All this is fascinating news – and very exciting! These European markets are relatively untapped – for Indie writers, as well as for Amazon et al. In so many countries English is widely spoken and read, particularly in Scandinavia. Anything which convinces Amazon to work harder at being competitive in Europe has the potential to make a dramatic difference to the sales of anyone already doing well on Amazon Uk and US – okay, so none of us have ever sold a book in Germany (I personally believe the .de store to be a myth), but if you add up the strong English speaking communities in countries all across Europe – most of whom are younger generation and so tech-friendly and gadget-happy – it could be the best news ever! Perhaps more importantly (and less self-centerd-ly), self publishers from those countries would also have a fiesta! Imagine the struggle of, say, a Danish or Portuguese Indie writer, trying to get their work seen and earn a crust in the process? And we think we’ve got it hard, with Amazon already in our corner…
Merde!
Tony